Large chains manage thousands of products and hundreds of suppliers, with warehouses that operate on tight schedules. For the system to work, each supplier has to deliver exactly what was ordered, at the agreed time and in the expected format. Specific requirements vary from chain to chain, but the essentials are usually the same.
Usual requirements
- Service level: delivering the full order on time. Many chains measure the percentage of orders delivered in full and on time, and apply penalties or review the relationship if the target is not met.
- Delivery slots: deliveries are made in a booked time window. Arriving late can mean not unloading that day.
- Delivery format: pallet type, maximum height and weight, single-product or mixed pallets as agreed.
- Labelling and identification: standard barcodes on the product, case and pallet, so that goods can be received automatically.
- Electronic data interchange: orders, despatch advices and invoices through standard systems, without paper documents.
- Shelf life and traceability: for products with an expiry date, a minimum remaining shelf life on delivery and the ability to trace each batch.
What it means for the supplier
Meeting these requirements affects the whole company: production planning, inventory, warehouse organisation, transport and information systems. A supplier used to working with smaller customers often has to change processes that had worked well until then.
It also affects costs. Service requirements mean holding more inventory or capacity, and penalties can significantly reduce margin if they are not controlled. It is therefore advisable to calculate the real profitability of the customer including these costs.
How to prepare
- Know the chain’s supplier manual in detail and translate it into internal procedures.
- Measure your own service level before the customer does: complete orders, on-time deliveries and errors.
- Adjust planning and safety stock to the chain’s lead times.
- Adapt the warehouse and transport to the delivery formats and delivery slots.
- Implement labelling and electronic data interchange early enough to test them.
Common mistakes
- Accepting the terms without calculating their logistics cost or the effect of penalties on margin.
- Treating the chain as just another customer, without an internal owner for service and the logistics relationship.
- Leaving systems and labelling changes to the last minute, after orders have already started.
A supplier that performs consistently earns the chain’s trust, which makes it easier to add products and negotiate better terms.